The problem appeared out of nowhere using official release of sandboxie for many years.
I have tried doing full removal of sandboxie and installed beta 5.23.5 with all settings default (all programs should be allowed to both access the internet as well as start and run)

I can run all kinds of programs sandboxed, but as soon as any of them need to use dllhost.exe the error box pops up (often need to close the box many times) and then programs continue to run)

I dont have any special programs on my PC other than fully updated windows defender, Avast free antivirus and spybot search & destroy.

I suspect a recent update (windows, flash player, java or similar ?) may be the cause but of course I can't rule out other possible causes like if something have happened to my windows installation ?

If the issue persists, try removing your security software. If no difference, please provide the results of running Res. Acc. Monitor, as well as a copy of your configuration file.
Resource Access Monitor:https://www.sandboxie.com/ResourceAccessMonitor
Copy/paste the output.
Highlight it and click on the "</>" button to format it in the forums.

Config File:
Configure --> Edit configuration
Copy/paste contents
Highlight contents and click on the "</>" button to format it in the forums.

Easiest way to reproduce is to rightclick on wmedia player and make it run in Sandboxie as media player apparently is trying to use dllhost.exe. Any other program that try to use dllhost.exe will produce same result but we all have media player

There was new update today for Win 10, 1709, 32 bit: KB4074588
Check please if it has some influence on Sbiedll initialization. (I still didnt uninstal KB4058258, I still dont use SB for browsing. I use Internet Expolrer 11.)

Looks like KB4074588 is an update to KB4058258. If I install KB4074588 , KB4058258 disappears from my installed list.
Upon removal and a reboot, x258 comes back, and the issue persists.

I manually removed KB4058258 (after 588 was gone), and the issue resolved. I then ran a Windows update, which only installed KB4074588 and the issue came back. So looks like if you do an update now, you get KB4074588 which will also trigger the issue due to the above explained (and explains why I did not see a difference when I manually got both).

Is a fix for this issue in progress? I am experiencing the sbiedll.dll initialization fail on both 5.23 and 5.22 Sandboxie versions, and uninstalling the x588 update also only temporarily resolves the issue.